Woolf v. Simone (In re Simone), 18-21993 (JJT)

• Court: United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — District of Connecticut
• Writing for the Court: James J. Tancredi United States Bankruptcy Judge
• Parties: IN RE: RICHARD P. SIMONE, Debtor. v. RICHARD P. SIMONE, Defendant. ANDREW WOOLF, ANDREW KATZ, and ELENA VAGNEROVA, Plaintiffs
• Docket Number: ADV. PRO. 19-02005,18-21993 (JJT)
• Decision Date: 08 February 2022

IN RE: RICHARD P. SIMONE, Debtor.

ANDREW WOOLF, ANDREW KATZ, and ELENA VAGNEROVA, Plaintiffs
v.
RICHARD P. SIMONE, Defendant.

No. 18-21993 (JJT)

ADV. PRO. No. 19-02005

United States Bankruptcy Court, D. Connecticut, Hartford Division

February 8, 2022

CHAPTER 7

MEMORANDUM OF DECISION ON PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT RE: ECF Nos. 106, 107, 233, 236, 237, 241, 383

James J. Tancredi United States Bankruptcy Judge

I. INTRODUCTION

Andrew Woolf, Andrew Katz, and Elena Vagnerova (collectively, "Plaintiffs") commenced this Adversary Proceeding on March 15, 2019 against Richard P. Simone (the "Debtor" or "Defendant"). Plaintiffs' six-count complaint (ECF No. 1, the "Complaint") seeks to have this Court deem certain debts owed to them non-dischargeable under 11 U.S.C. §§ 523(a)(2)(A)-(B), (a)(4), and (a)(6), and to deny the Debtor's discharge pursuant to 11 U.S.C. §§ 727(a)(3) and (a)(4)(A). The essence of Plaintiffs' claims boils down to an allegation that the Defendant induced the Plaintiffs to collectively invest $495, 000 in a fraudulent, fake, and non-existent real estate transaction, and that for years the Defendant lied and misled Plaintiffs as to where their money went and for what purpose it was deployed. Plaintiffs have since amended

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their Complaint to add a seventh Count seeking the entry of a liquidated civil judgment against the Defendant (ECF No. 359).^[1]

Now pending before the Court is the Plaintiffs' Motion for Summary Judgment on Counts I-VI of the Complaint (ECF No. 107, the "Motion"), the Defendant's objections thereto (ECF Nos. 236, 241), and the Plaintiffs' reply (ECF No. 383). Initial argument on the Motion was set for February 28, 2020 but was subsequently rescheduled and thereafter continued without date so as to allow the parties to proceed with various discovery and document production matters that may have potentially impacted the Motion. A hearing on the Motion was then scheduled for August 18, 2020. After receipt of the Plaintiffs' Reply to the Defendant's Objection to the Motion, the Court took the matter under advisement.

After surveying all of the core and material undisputed facts, the Court finds that it must grant summary judgment as to Counts I, II, III, IV, V and VI. These core and material facts demonstrate that there is no genuine dispute as to the Defendant's liability, however, because Plaintiffs did not move for summary judgment as to Count VII, the Court will reserve entry of a final judgment on Count VII pending the outcome of a hearing in damages. Accordingly, for the reasons that follow, the Plaintiffs' Motion is hereby GRANTED as to Counts I, II, III, IV, V and VI, and the Defendant's Objection is hereby OVERRULED.

II. JURISDICTION

The United States District Court for the District of Connecticut has jurisdiction over the instant proceeding under 28 U.S.C. § 1334(b), and the Bankruptcy Court derives its authority to

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hear and determine this matter on reference from the District Court under 28 U.S.C. §§ 157(a) and (b)(1) and the General Order of Reference of the United States District Court for the District of Connecticut dated September 21, 1984. This Adversary Proceeding constitutes a core proceeding under 28 U.S.C. §§ 157(b)(2)(I) and (J).

III. SUMMARY JUDGMENT STANDARD

Federal Rule of Civil Procedure 56, made applicable to these proceedings by Federal Rule of Bankruptcy Procedure 7056, directs that "[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Bankr.P. 7056; Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). "A genuine issue of material fact exists if 'the evidence is such that a reasonable jury could return a verdict for the nonmoving party.'" Nick's Garage, Inc. v. Progressive Cas. Ins. Co., 875 F.3d 107, 113-14 (2d Cir. 2017) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

Upon consideration of a motion for summary judgment, "all reasonable inferences are to be drawn, and all ambiguities resolved, in favor of the non-moving party." In re Bak, 2013 WL 653073, at *3 (Bankr. D. Conn. 2013) (citations omitted). Additionally, "the judge's function is not . . . to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Liberty Lobby, Inc., supra, 477 U.S. at 249.

"The moving party bears the initial burden of informing the court of the basis for its motion and identifying the admissible evidence it believes demonstrates the absence of a genuine issue of material fact." Boland v. Wilkins, 2020 WL 4195740, at *1 (D. Conn. 2020) (citing Celotex, supra, 477 U.S. at 323). While the evidence relied upon at the summary judgment stage need not be presented in admissible form, it must, however, be capable of being presented at trial

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in admissible form. In re Soundview Elite Ltd., 543 B.R. 78, 100-01 (Bankr. S.D.N.Y. 2016) ("[Rule 56(c)(2)] provides for the exclusion of matter that cannot be presented in a form that would be admissible in evidence-not that is not so presented." (emphasis in original)). The moving party may satisfy its burden "by showing . . . that there is an absence of evidence to support the nonmoving party's case." PepsiCo, Inc. v. Coca-Cola Co., 315 F.3d 101, 105 (2d Cir. 2002) (per curiam) (internal quotations and citations omitted).

If the movant successfully demonstrates that there is no genuine issue of material fact, then the burden shifts to the non-movant to "set forth 'specific facts' demonstrating that there is 'a genuine issue for trial.'" Official Comm. of Unsecured Creditors of Affinity Health Care Mgmt., Inc. v. Wellner (In re Affinity Health Care Mgmt., Inc.), 499 B.R. 246, 251 (Bankr. D. Conn. 2013) (quoting Wright v. Goord, 554 F.3d 255, 266 (2d Cir. 2009)). The "mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Liberty Lobby, Inc., supra, 477 U.S. at 247-48 (emphasis in original).

Importantly, the non-movant may not defeat a properly supported motion for summary judgment by relying on self-serving and conclusory statements concerning the true nature of the facts, see Wyler v. U.S., 725 F.2d 156, 160 (2d Cir. 1983), but rather, it "must offer some hard evidence showing that its version of the events is not wholly fanciful." Jeffreys v. City of N.Y., 426 F.3d 549, 554 (2d Cir. 2005) (quoting D'Amico v. City of N.Y., 132 F.3d 145, 149 (2d Cir. 1998)). Further, "a party may not create an issue of fact by submitting an affidavit in opposition to a summary judgment motion that, by omission or addition, contradicts the affiant's previous deposition testimony." Hayes v. New York City Dept. of Corrections, 84 F.3d 614, 619 (2d Cir. 1996). "When no rational jury could find in favor of the nonmoving party because the evidence

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to support its case is so slight, there is no genuine issue of material fact and a grant of summary judgment is proper." Gallo v. Prudential Residential Services, L.P., 22 F.3d 1219, 1224 (2d Cir. 1994).

IV. THE UNDISPUTED FACTS

Local Rule 56(a)(1) of the Local Rules of Civil Procedure of the United States District Court for the District of Connecticut requires that a party moving for summary judgment file a Local Rule 56(a)(1) Statement of Undisputed Material Facts. D. Conn. L. R. 56(a)(1). Local Rule 56(a)(2) requires that a party opposing a motion for summary judgment file a Local Rule 52(a)(2) Statement of Facts in Opposition to Summary Judgment. D. Conn. L. R. 56(a)(2). Each material fact set forth in a movant's statement and supported by the evidence "will be deemed to be admitted (solely for the purposes of the motion) unless such fact is controverted by the Local Rule 56(a)(2) Statement required to be filed and served by the opposing party in accordance with this Local Rule . . ." See D. Conn. L. R. 56(a)(1); see also Parris v. Delaney (In re Delaney), 504 B.R. 738, 746-47 (Bankr. D. Conn. 2014). A party that denies an asserted fact by stating supplementary information rather than denying the asserted fact and proffering factual evidence to controvert it "frustrate[s] [Local] Rule 56(a)'s purpose of clarifying whether a genuine dispute of material fact exists." In re Curtis James Jackson III, 630 B.R. 700, 709 (Bankr. D. Conn. 2021) (quoting Dingwell v. Cossette, 2020 WL 5820363, at *3 n. 2 (D. Conn. Sept. 30, 2020)).

At the summary judgment stage, "[a] party may object that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence." Fed.R.Civ.P. 56(c)(2). The evidence relied upon at this stage, however, need not be presented in

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admissible form, but rather, it must be capable of being presented at trial in admissible form. In re Soundview Elite Ltd., supra, 543 B.R. at 100-01.^[2]

Based upon the review of the parties' extensive summary judgment submissions, in addition to the Complaint, the Defendant's Answer and Special Defenses (ECF No. 31), and this Court's independent examination of that record, the Court finds the following material facts to which there is no genuine dispute:^[3]

The Debtor's Background

1. The Debtor was a stockbroker in the 1990s. After being arrested in 1997 and prosecuted by the Manhattan District Attorney's office, the Debtor "admitted stealing more than $800, 000 from one client from the firm. He pleaded guilty to one count of Grand Larceny in the Second Degree and was sentenced to serve five years of probation and to pay a $5, 000 fine."

2. For these actions and others, the Debtor was sanctioned by regulators, disbarred by the Securities and Exchange Commission ("SEC") and the National Association of Securities Dealers ("NASD") and,...